Dmitry Chikhachev, Runa Capital: “We continue investing in deep tech companies and started paying much more attention to quantum computing, open source and machine learning startups”.
French Tech asked General partner and Co-founder of Venture Fund “Runa Capital” about their activity, ambitions and plans for the nearest future. And of course about investing in startups in COVID-19 times. In fact, in the world of “new technologies and startups” projects are growing as well as investments…
Dmitry, tell us about the creation of the Venture Fund “Runa Capital” in Russia and then, in other countries.
Runa Capital was a global venture firm from its inception. Initially, we started with the Moscow-based office in 2010 and in 2014 almost half of our portfolio was based in the USA. Despite the complex political situation, it was a right time for opening an office in the heart of Silicon Valley, headed by our relocated partner Andre Bliznyuk. Another partner, Dmitry Galperin, opened an office in Berlin in 2018 to strengthen our presence in the DACH region. Now we also have a soft presence at WeWorks of Paris and London, where I and our principal Konstantin Vinogradov spent a lot of time before coronavirus lockdowns.
What startups have become world famous after getting investment from Runa? What startups among them are “made in France”?
The most well-known startup funded Runa is an open-source company Nginx, which we initially invested in 2011 and exited in 2019 (it acquired at $670M enterprise value by F5 Networks). Another good investment was French startup Capptain, acquired by Microsoft in 2014. Several rising stars from France are still in Runa’s portfolio, for instance, retail-focused SaaS vendors Critizr and Simplifield, which raised next funding rounds in 2019.
What criterias are the most positives in French IT ecosystem for a potential investor?
France is well-known for its strong educational system (grandes écoles, etc) leading to abundance of advanced tech startups. Currently French ecosystem is getting strategic momentum — on the one hand, it is undervalued relatively to London and Berlin, on the other hand, Brexit and French government support significantly stimulate its startup market. This is a good time for investment in French tech companies.
What venture funds are the most effectives, in your opinion?
That’s simple — venture funds with the highest net IRRs for their LPs are the most efficient.
How do you search for new projects to invest in?
We have proactively look for fast-growing companies in target investment areas (B2B SaaS, deep tech, fintech, edutech, digital health) and closely work with extensive network of its partners. For instance, Runa co-invested with many French venture funds: Partech, Xange, Ventech, Alven, Brighteye, eFounders, etc.
What criterias are the most important for you to invest in a startup?
A startup should solve a massive and painful problem, preferable in our target areas, and have the potential to become a $1B+ company. Runa usually invests $1–10M at Series A stage, when a company is ready for scaling, so it should have proven product-market fit ($1M ARR is a good indicator) and positive unit economics. Deep tech startups could be exceptions for this rule, but need to show other meaningful data: strong technology, open-source traction, active users, etc.
Runa Capital closed the third fund of investments of 157 Mln USD for startups in Europe and USA. Do you already think about the profile of startups to invest? What technologies are the most progressives for 2021–2020 years?
We continue investing in deep tech companies and started paying much more attention to quantum computing, open source and machine learning startups.
How did COVID-19 influence the activity of Runa Capital?
COVID-19 brought multiple implications for our portfolio companies — both positive and negative. Some of our startups, for instance, in online education and customer support automation significantly benefited from lockdowns across the globe. Some portfolio companies had to slow down their growth and postpone fundraising, but nothing crucial happened. The fund continues working and considering new investments, however, much more carefully than before.
How do you see the cooperation between Runa Capital and French Tech Moscow in 2020/2021 years?
Runa is looking forward to strengthening our connections with French businesses — from small startups to large corporations
